The stable outlook on Korea Housing Finance Corp. (KHFC) reflects the outlook on the sovereign credit rating on Korea (AA/Stable/A-1+). We expect KHFC to retain both its critical public policy role of providing long-term, fixed-rate mortgage loans and its integral link with the government for at least the next few years. We equalize the ratings on KHFC with those on the sovereign because we believe the company will remain a government-related entity with an almost-certain likelihood of receiving extraordinary government support when needed. We would lower the ratings on KHFC if we were to downgrade Korea. We may lower the sovereign ratings on South Korea if we believe geopolitical tensions related to North Korea would intensify to a point that
